Indian Development Giant Wants To Build Offices In U.S., UK

As the U.S. office market holds its breath amid potential headwinds caused by the omicron variant, one international investor is striking a vote of confidence.

India-based real estate giant RMZ Corp. is planning to enter the office development game globally, focusing on major gateway cities including New York.

“Our customers need workspace solutions worldwide, which pushed us to look for geographies outside India,” RMZ Corp. Chairman Manoj Menda told Canadian news outlet BNN Bloomberg. “Our focus will primarily be the key gateway cities like London, Paris and New York for scaling up.”

Menda told BBN the company would allot 15% of its $4B annual capital deployment to its global office development effort and would also be seeking investment partners.

The expansion marks a vote of confidence for the office sector from a company that is, by its own account, one of the largest privately owned real estate developers and owners in Asia.

Just before Thanksgiving, optimism was building in some corners of commercial real estate for the U.S. office market. Landlords and tenants seemed to be planning for office users to finally be ready to commit to space. A NAOIP survey conceded that hybrid and remote work would likely reduce the long-term need for office space, but those losses could be partially offset by employment growth in industries that use offices.

The omicron variant has tempered that optimism. Some major companies once again delayed returning to the office while others are still waiting for substantive information about the threats posed by the variant to roll in.

But RMZ’s Menda expects demand for office space globally to shoot up, and the company is planning to move fast to capitalize on that potential. RMZ is looking to set up offices in London and Dubai by spring 2022 and establish teams to secure development rights by Q3 2022.

In April, RMZ sold $2B of its assets to a fund managed by Brookfield Asset Management. The transaction — India's largest real estate deal to date, according to RMZ — allowed the company to “ clear all their debts and fuel their hyper-growth strategy,” a release announcing the deal stated.

Including proceeds from the sale and from investment partners, RMZ was looking at spending $1B on its development efforts, BBN Bloomberg said.

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